Daily Current Affairs

6 August Current Affairs – Daily News



J&K loses its special status, divided into two UTs- Vijaita Singh #GS2 #Governance


Ending Jammu & Kashmir’s special status in the Indian Union, the BJP government extended all provisions of the Constitution to the State in one go, downsized the State into two Union Territories and allowed all citizens to buy property and vote in the State.


Leading the charge, Home Minister Amit Shah piloted two special resolutions and a Bill creating the Union Territories of Jammu & Kashmir and Ladakh through the Rajya Sabha on Monday. While the Union Territory of Jammu and Kashmir will have a legislature, the one in Ladakh will not.


The first resolution informed the House that the President had used his powers under Article 370 to fundamentally alter the provision, extending all Central laws, instruments and treaties to Kashmir. However, the drastically altered Article 370 will remain on the statute books


The government’s surgical strike on the State’s autonomy came as telephone and Internet services in the Valley were suspended, former Chief Ministers Omar Abdullah and Mehbooba Mufti remained under arrest and thousands of additional Central security personnel were deployed in the area.


























Mr. Shah said that if the Union Territory model worked well, the government would also consider giving Jammu and Kashmir the status of a State again and “no constitutional amendment would be required.


Mr. Shah said the Resolution for Repeal of Article 370 of the Constitution of India “would pass every legal scrutiny” and he was aware that an “NGO brigade” supported by some parties would challenge it.



Terrorism cannot end in the State till Article 370 or 35A continue. They are an obstacle to development. We want to embrace the Kashmiri youth. The move will bring development, tourism and industries to the State. These opportunities till now were controlled by only three families.


Governor Satya Pal Malik on Monday night reviewed the security situation with top officials in Jammu and emphasised the need for constant vigil to deal with any eventuality. The Army’s Northern Command chief Lt. Gen. Ranbir Singh met the Governor and briefed him about the security situation.


The provisions of Article 370 will cease to exist from the date the President of India issues a notification after the Lok Sabha passes the resolution. In 2011-12, Centre spent ₹3683 per person in rest of India and Rs 14,255 per person in J&K. In 2017-18 Centre spent ₹8,227 per person in rest of India whereas in J&K it spent ₹27,258 per person. Even then there was no development in the State because of corruption.


Congress leader and Leader of the Opposition Ghulam Nabi Azad described the move as murder of the Constitution and the democracy by the BJP-led government, stating that the accession of J&K to India had happened through Article 370. He said in the past 70 years, lakhs of people, many leaders and workers of the mainstream parties had made sacrifices, thousands of police and security personnel lost their lives in the State.


Responding to Mr. Azad, Mr. Shah said the State was assimilated into India through the Instrument of Accession signed by Maharaja Hari Singh on October 27, 1947, and Article 370 came later. He said the Congress government had also amended Article 370 through the same process in 1952 and 1962.






India briefs envoys on J&K move- Kallol Bhattacherje #GS2 #Governance


The Ministry of External Affairs on Monday reached out to the member-states of the U.N. Security Council and briefed envoys on the decision to end the Special Status of Jammu and Kashmir. The Indian outreach came as Pakistan said New Delhi’s move was unacceptable to Islamabad.


Senior MEA officials are briefing the envoys of several countries, including permanent members of U.N., on proposals related to Article 370 of the Indian Constitution and administrative reorganisation of Jammu and Kashmir that were introduced in Parliament today,” said a source, indicating that the envoys were told that the legislative procedure was an “internal” affair of India.


Diplomats were told that the Indian parliamentary move was aimed at ensuring “good governance, promoting social justice and ensuring economic development” in Jammu and Kashmir.


Following India’s move, Pakistan maintained that the territory continues to remain an international dispute. “No unilateral step by the Government of India can change this disputed status, as enshrined in the United Nations Security Council resolutions. Nor will this ever be acceptable to the people of Jammu and Kashmir and Pakistan. As a party to this international dispute, Pakistan will exercise all possible options to counter the illegal steps.



Prime Minister Imran Khan had called for international mediation on Kashmir, citing escalating tension over Kashmir between India and Pakistan.






A fatal legal error, says P. Chidambaram #GS2 #Governance


Senior Congress leader P. Chidambaram said the government cannot modify Article 370 by using another provision of Article 370. By doing so it made a “fatal legal error” and it would discover this in due course.


The Rajya Sabha passed a resolution moved by Home Minister Amit Shah that would repeal the provisions under Article 370 of the Constitution, which granted a special status to Jammu and Kashmir.


While introducing the resolution earlier in the day, Mr. Shah had said, “Under Article 370(3), there is a provision that the President, on recommendation of Parliament, has the power to amend or cease the implementation of Article 370, through a public notification. He later clarified to Mr. Chidambaram that the said provision has to be read with Article 371 D (Special provisions with respect to the State of Andhra Pradesh.)


State was being reduced to the state of municipal administrations and instead of protecting the rights of the States, the Rajya Sabha was passing Bills which were on the concurrent list. Leader of the Opposition Ghulam Nabi Azad said the State’s head, considered India’s crown, has been “chopped off” and it was a “matter of shame” that the Centre had reduced the State to a non-entity with Lt. Governor’s rule.


Tiruchi Siva (DMK) termed the move unconstitutional as the Constitution says that only the Assembly should decide on such crucial issues.





Bills against lynching, honour killing passed- Mohammed Iqbal #GS2 #governance


The Rajasthan Assembly on Monday passed two separate Bills against mob lynching and honour killing, making stringent provisions of punishment and penalties for these offences that were made cognisable and non-bailable. While honour killing will be punishable with death sentence, those convicted of lynching will be punished with life imprisonment and a fine of up to ₹5 lakh.


With the passage of the Protection from Lynching Bill, 2019, Rajasthan has become the second State after Manipur to have a dedicated legislation that criminalises mob lynching as a special offence. The Manipur Assembly had passed a similar Bill in December 2018.


The State has witnessed several incidents of mob lynching since April 2017, when Haryana’s dairy farmer Pehlu Khan was killed allegedly by a mob of cow vigilantes on the Jaipur-Delhi national



highway. The Bill was introduced by Parliamentary Affairs Minister Shanti Dhariwal in the Assembly on July 30.


During the debate on the Bill, Leader of the Opposition Gulab Chand Kataria said the Indian Penal Code already had sufficient provisions to penalise the offenders, while the Bill had changed an important definition by describing just two persons as a mob. He alleged that the Bill had been brought to please a particular community.


Replying to the Opposition’s objections, Mr. Dhariwal said the Bill’s subject was part of the concurrent list and the State government had the power to bring such a legislation. He defended the definition of mob as two or more persons, saying two people had the ability to grievously harm the third person. He also described the Bill as a “progressive law”, which would promote social harmony.


The Bill provides for appointment of a nodal officer of the rank of Inspector-General of Police to prevent lynchings and establishment of relief camps in safe zones for the victims.


It defines lynching as an act of violence, whether spontaneous or planned, by a mob on the grounds of religion, race, caste, sex, place of birth, language, dietary practices, sexual orientation, political affiliation and ethnicity.


The Bill against honour killing, titled the Rajasthan Prohibition of Interference with the Freedom of Matrimonial Alliances in the Name of Honour and Tradition Bill, 2019, was passed after making a few amendments on the basis of suggestions given by some MLAs during the discussion.


The Bill has laid down death penalty or life sentence and a fine up to ₹5 lakh for killing a couple or either of them on the basis that their marriage had dishonoured or brought disrepute to the caste, community or family.






Aamir Khan launches Mission Shakti #GS2 #SocialIssues


Actor Aamir Khan on Sunday attended the launch function of Mission Shakti, an initiative by Maharashtra minister Sudhir Mungantiwar to train athletes from Chandrapur and Gadchiroli for international events like the Olympics.


Khan also broke into a song mid-speech to motivate the athletes attending the programme. He felicitated a team of tribal mountaineers from here who had recently scaled Mount Everest as part of Mission Shaurya.


Lok Sabha passes Surrogacy Bill #GS2 #Governance


A bill which seeks to ban commercial surrogacy in the country was passed by Lok Sabha on Monday by a voice vote.


The Surrogacy (Regulation) Bill, 2019 also provides for constitution of surrogacy boards at national and state levels, as well as that the intending couples should not abandon such a child under any condition.


Responding to the debate on the bill, Health Minister Harsh Vardhan said the ban commercial surrogacy was “the need of the hour”. He said several countries have banned commercial surrogacy. It is only legal in the state of California besides Russia and Ukraine.


The minister assured the members that once the rules and regulations of the proposed law are put in place, it would make the legislation stronger.


Besides, the bill says that only close relatives will be permitted to act as surrogates to infertile couples for “ethical altruistic” reasons. There have been reports concerning unethical practises, abandonment of children born out of surrogacy and exploitation of surrogate mothers


He said, the 228th report of the Law Commission had recommended that the government should enact a legislation to ensure that there is only restrictive surrogacy in the country and commercial surrogacy is banned.


The bill was moved for passage and consideration amid noisy protest and sloganeering by several parties including Congress, DMK, CPI (M) and National Conference. Only Indian couples who have been legally married for at least five years would be allowed to opt for surrogacy, as per the Statement of Objects and Reasons of the bill.


The bill seeks to “allow ethical altruistic surrogacy to the intending infertile Indian married couple between the age of 23-50 years and 26-55 years for female and male, respectively”.






Bill for more Supreme Court judges gets Lok Sabha nod #GS2 #Governance


Union Law Minister Ravi Shankar Prasad told the Lok Sabha that judges in the higher judiciary should be careful about their observations in ongoing cases and should be pertinent to the case they are hearing.


Mr. Prasad made these remarks during the passage of a Bill to increase the strength of judges in the Supreme Court from 30 to 33 in addition to the Chief Justice of India. The Minister said that at times, judges made remarks about government policy that are arrived after due processes.



The Minister also said that the move is aimed at cutting down on the delay of the top court that has nearly 60,000 cases pending.


The Bill comes days after Chief Justice of India Ranjan Gogoi requested Prime Minister Modi to increase the number of Supreme Court judges. The Supreme Court (Number of Judges) Act, 1956 was last amended in 2009 to increase the judges strength from 25 to 30 excluding the CJI.






Lok Sabha passes Transgender persons protection of rights bill #GS2 #Governance


The Lok Sabha on August 5 passed a bill which provides a mechanism for social, economic and educational empowerment of transgenders.


The Transgender Persons (Protection of Rights) Bill 2019 was passed by a voice vote amid noisy protests by some opposition parties over Congress leader Adhir Ranjan Chowdhury not being allowed to speak on his adjournment notice.


Replying on the bill, Minister of State for Social Justice Rattan Lal Kataria said it makes provision for establishing a national authority for safeguarding rights of transgenders. The minister said according to the 2011 census there are more than 4.80 lakh transgenders in the country.


He said in the bill there are provisions for penalty and punishment in cases of offences and sexual harassment against transgender persons.


A contentious provision that criminalised begging by transgender people has been removed from the bill. The provision was part of the bill when it was introduced by the previous government. The bill had lapsed.


According to the bill, a transgender is a person whose gender does not match with the gender assigned to that person at birth and includes trans-man or trans-woman (whether or not such person has undergone sex reassignment surgery or hormone therapy or laser therapy or such other therapy), person with inter-sex variations, gender-queer and person having such socio-cultural identities as ‘kinner’, ‘hijra’, ‘aravani’ and ‘jogta’.


Going by the bill, a person would have the right to choose to be identified as a man, woman or transgender, irrespective of sex reassignment surgery and hormonal therapy. It also requires transgender persons to go through a district magistrate and district screening committee to get certified as a trans person.


How the status of Jammu and Kashmir is being changed- K. Venkataramanan #GS2 #Governance


Jammu and Kashmir enjoyed special status under Article 370 of the Constitution of India. This Article describes it as a temporary provision and that it will cease to be operative if the President issues a public notification to that effect. However, prior to that, a recommendation is necessary from the Constituent Assembly of Jammu and Kashmir.


As a result of Article 370, Jammu and Kashmir had its own Constitution, and all laws passed by Parliament will not be applicable to the State, unless the State government gives its concurrence. The President is empowered to decide what provisions of the Constitution of India would be applicable to the State and what are the exceptions, but with the State government’s concurrence.


The Constitution (Application to Jammu and Kashmir) Order, 1954, lists the Articles and provisions that apply to J&K. Further, the President also listed a set of exceptions under Article 35A of the Constitution (this Article does not figure in the text of the Constitution of India, but figures only in the J&K’s Constitution).


While the 1954 presidential order constituted a founding legal document for Jammu and Kashmir, Article 35A protected the exclusive laws – such as the bar on outsiders buying property and women marrying non-Kashmiris losing their property rights – of the State.


These special measures can be altered only on the recommendation of the Sadar-i-Riyasat of Jammu and Kashmir, acting on the advice of the Council of Ministers, or by the “Constituent Assembly” of that State. As of now, there is no “Constituent Assembly”.


This was how the Modi government has changed this special status of Kashmir overnight:


  1. 1. President Ram Nath Kovind issued a presidential order under Article 370 (1) of the Constitution. This clause enables the President to specify the matters which are applicable to Jammu and Kashmir. As it can be issued only with the Jammu and Kashmir government’s concurrence, the notification uses the words “with the concurrence of the Government of the State of Jammu and Kashmir”. This presumably means the Governor, who is now administering the State under President’s Rule, has given his concurrence on behalf of the State government.


  1. The Order supersedes the 1954 Order. This effectively means that all the provisions that formed the basis of a separate “Constitution” for Jammu and Kashmir stand abrogated. The Order declares that all the provisions of the Constitution of India, shall apply to Jammu and Kashmir too.


  1. However, some special measures were still needed for the scrapping of Article 370 altogether. Therefore, a few clauses were added to Article 367 of the Constitution.


Article 367 contains “Interpretations”. They contain guidance on how to read or interpret some provisions. The new clauses say, when applicable to Jammu and Kashmir, all references to the ‘Sadar-i-



Riyasat’, acting on the aid and advice of the Council of Ministers, will be construed as references to the Governor of Jammu and Kashmir. All references to the State government shall mean “the Governor”.


And most importantly, the reference to the “Constituent Assembly” in a proviso to Article 370 (3) has been amended to read “Legislative Assembly of the State”. This is the proviso that says the President can declare that Article 370 is no more operative only on the recommendation of the Constituent Assembly.


As there is no Constituent Assembly in existence now, there is no body to “recommend” the demise of Article 370. Therefore, the State Assembly has to play that role.


The issuance of the Presidential Order has set the stage for the abrogation of Article 370. Here, the government has made use of the fact that Jammu and Kashmir is under President’s Rule.


Under the Proclamation issued under Article 356 of the Constitution, by which the President takes over the administration of a State, Parliament usually performs the legislative functions of the State Assembly. For instance, when a State is under Central rule, the budget allocations for that State are voted in Parliament in the absence of the Assembly.


The Union Home Minister introduced two statutory resolutions, one, to recommend that the President issue a notification rendering Article 370 inoperative, and two, to accept the Jammu and Kashmir Reorganisation Bill. The passage of the former resolution will enable the President to declare that Article 370 has ceased to operate.


The Bill envisages converting Jammu and Kashmir into a Union Territory with a legislature, and carve out Ladakh region as another Union Territory, but without a legislature.






President’s Order scraps its predecessor and amends Article 370- Krishnadas Rajagopal #GS2 #Governance


The President’s notification of the Constitution (Application to Jammu and Kashmir) Order of 2019 of August 5 amends Article 370 of the Indian Constitution and scraps its 65-year-old predecessor, The Constitution (Application to Jammu and Kashmir) Order of May 14, 1954.


By junking the 1954 Order, the notification takes away the special rights and privileges enjoyed by the residents of Kashmir. It has effectively allowed the entire provisions of the Constitution, with all its amendments, exceptions and modifications, to apply to the area of Jammu and Kashmir. This is evident from the text of the August 5, 2019 notification.


For one, the 2019 notification “supersedes” the 1954 Order. And two, it declares that “all the provisions of the Constitution, as amended from time to time, shall apply in relation to the State of Jammu and Kashmir”.



The August 5 notification has been issued under Article 370 of the Constitution. In short, the government has employed Article 370, which had once protected the 1954 Order giving special rights to the people of Jammu and Kashmir, to scrap the sexagenarian Order.


So far, the Parliament had only residuary powers of legislation in J&K. This included enacted of laws to prevent terror and secessionist activities, for taxation on foreign and inland travel and on communication.


Now, the Centre has proposed the Jammu and Kashmir Reorganisation Bill of 2019, which says the new Union Territory of Jammu and Kashmir would be administered/governed like the Union Territory of Puducherry.


The Bill proposes wide powers to the Lieutenant Governor of the proposed Union Territory of Jammu and Kashmir and makes it the “duty” of the Chief Minister of the Union Territory to “communicate” all administrative decisions and proposals of legislation with the LG. Moreover, all Central laws and State laws of J&K would apply to the new Union Territories of J&K and Ladakh.


Assets and liabilities of J&K and Ladakh would be apportioned on the recommendation of a Central Committee within a year. Employees of State public sector undertakings and autonomous bodies would continue in their posts for another year until their allocations are determined. The police and public order is to be with the Centre.


The tabling of the proposed Reorganisation Bill is also proof that the long reign of the 1954 Order has ended. The 1954 Order had introduced a proviso to Article 3, namely that “no Bill providing for increasing or diminishing the area of the State of Jammu and Kashmir or altering the name or boundary of that State shall be introduced in Parliament without the consent of the Legislature of that State”. That power of the State Legislature to give prior consent does not exist anymore. This has provided a free hand to the Centre to table the Reorganisation Bill.


The 1954 Order had also brought into existence Article 35A. This Article gave the State Legislature of Jammu and Kashmir exclusive power to define classes of persons who are/shall be permanent residents of the State; to confer permanent residents special rights and privileges and impose restrictions upon other persons from outside the State; make laws and conditions for State government employment, acquisition of immovable property, settlement rights, scholarships and other forms of aid from the State government.


With the removal of the 1954 Order, the power of the State Legislature ceases to exist and Parliamentary laws, including that of reservation, would apply to Jammu and Kashmir as it does in other parts of the country. The government called this the end of “positive discrimination” and the closing of the “chasm” between residents of J&K and citizens of other parts of the country.


The removal of the 1954 Order further also negates a clause which was added to Article 352. The Order had mandated that no proclamation of Emergency on grounds “only of internal disturbance or imminent danger shall have effect” in the State unless with the concurrence of the State government.



The second part of the August 5, 2019 notification deals with the addition of a new clause to Article 367 which amends the proviso to clause (3) of 370. Article 367 deals with the applicability of the General Clauses Act 1897 to interpret the provisions of the Constitution,.


The August 5 notification amends the expression “Constituent Assembly”, contained in the proviso to clause (3) of Article 370, to mean “Legislative Assembly”.


Clause (3) of Article 370 gives the President power to end the special rights and privileges of the people of Jammu and Kashmir under the 1954 Order. However, the clause carries a rider. That is, the President would have to first get the consent of the Constituent Assembly of J&K before issuing such a notification. This rider or check on the President’s power was intended to give the people of the State a say in their own future.


Now, the Constituent Assembly has ceased to exist since 1956, when it was dissolved. The Assembly, at the time of its dissolution, had said nothing about the abrogation of Article 370. Consequently, Article 370, though it resides among the ‘temporary provisions’ of the Constitution, is deemed have become a permanent feature of the Constitution.


The August 5 notification has tided over this obstacle of a non-existent ‘Constituent Assembly’ by amending the expression in the proviso to ‘Legislative Assembly’. Ideally, any such amendment to the name of the ‘Constituent Assembly’ would require the assent of the Constituent Assembly itself. Besides, an amendment in Article 370 should have undergone the constitutional amendment procedure envisaged under Article 368 of the Constitution.


But the government can, on the other hand, argue that the amendment made in its August 5 notification only applies to Jammu and Kashmir and not the entire Dominion of India, and so, does not require a constitutional amendment. This point of contention may reach the Supreme Court, where several petitions on the constitutionality of Article 35A, and in consequence Article 370, are pending for adjudication.






What the repeal of Article 35A entails- T. Ramakrishnan #GS2 #Governance


What does Article 35A convey? What does its abrogation entail?


Included in the Constitution through a presidential order of May 1954, the provision is apparently based on the principle of safeguarding the interests of “sons of the soil”, apart from drawing strength through Article 370.


An offshoot of the 1952 Delhi Agreement between Jawaharlal Nehru, Prime Minister of the country, and Sheikh Abdullah, Premier of J&K, the provision envisages the creation of a group of persons, “permanent residents,” who are entitled to be provided “special rights and privileges” in matters such as employment in the State government and acquisition of immovable property.



In addition to raising the question of constitutionality of the provision on the ground that the inclusion was not made through a legislative route, critics of the Article often point out how “discriminatory” the provision has been towards women who marry “non-permanent resident-men”.


The popular interpretation of the law is that such women lose their rights and privileges. Though the Jammu & Kashmir High Court, in 2002, held that the women married to “non-permanent residents” would not lose rights, there have been complaints that there is no change in the position.


How would the status of J&K as a Union Territory (and Ladakh too as a non-legislature UT) affect the governance of these States?


There are two models – Puducherry and the National Capital Territory of Delhi – which can guide the proposed Legislative Assembly of Jammu and Kashmir on becoming a Union Territory. While the former seems to be having no restriction with regard to framing laws on police, public order and land, the latter is specifically barred from making laws on the three subjects. It was through an enabling provision – 239 A – that the Puducherry legislature was formed, whereas, in the case of Delhi, the provision – 239AA – spells out the contours of powers of the legislature and council of ministers.


In respect of Ladakh, where there is no Legislative Assembly, the role of the Administrator or Lt.


Governor will be greater than that of Jammu & Kashmir. His source of authority is the President.






Move triggers fears in the northeastern region #GS2 #Governance


The Centre’s move to revoke Article 370 has triggered apprehensions in the northeastern States enjoying similar constitutional safeguards. The Constitution bestows special provisions under Article 371A for Nagaland, Article 371B for Assam, Article 371C for Manipur, Article 371F for Sikkim and Article 371F for Mizoram.


Former Mizoram Chief Minister Lal Thanhawla said the move by the BJP-led National Democratic Alliance was a “red alert” for the people of the northeast.


It has become a threat to States like Mizoram, Nagaland and Arunachal which are protected by the Constitution. If 35A and 370 are repealed, Article 371G safeguarding the interests and existence of lesser tribals of Mizoram will be under severe threat.


The Mizo National Front government chose to adopt a “wait and watch” policy but NGOs such as the influential Young Mizo Association — which has spearheaded a movement against the Centre’s bid to push the Citizenship (Amendment) Bill — said any move to “tamper with” Article 371G would be opposed to the hilt.


This is something undermining the minorities in India. I think this is very undemocratic. People in Nagaland would be particularly worried as a settlement of the Naga political process is long overdue,”



said Chuba Ozukum, president of Naga Hoho, apex body of all Naga tribes. The “political process” is a term used for the peace talks between New Delhi and the Isak-Muivah faction of the extremist National Socialist Council of Nagaland that fought a secessionist battle with the armed forces until declaring a truce in July 1997.






Government unveils draft e-com norms #GS3 #Economy


To protect the interest of online shoppers, the Department of Consumer Affairs has released draft guidelines on e-commerce that state that an e-commerce entity cannot directly or indirectly influence the price of the goods or services.


The draft ‘e-commerce guidelines for consumer protection 2019,’ which adds that e-commerce firms need to ensure that personally identifiable information of customers is protected, is open for stakeholder comments for 45 days or till September 16, 2019.


“These are issued as guiding principles for e-commerce business for preventing fraud, unfair trade practices and protecting the legitimate rights and interests of consumers. These guidelines apply to business-to-consumer e-commerce, including goods and services


It added that every e-commerce entity needs to publish the name and contact details of the grievance officer on their website along with the mechanism by which users can lodge their complaints.


As per the draft, an e-commerce firm cannot falsely represent themselves as consumers or post reviews about goods and services in their name.


Besides, it proposed to make it mandatory for firms to display terms of contract with the seller relating to return, refund, exchange, warranty/guarantee, delivery/shipment, mode of payments and grievance redressal mechanism to enable consumers to make informed decisions.


The draft also proposes that once an e-commerce firm comes to know about any counterfeit product, and if the seller is unable to provide any evidence that the product is genuine, the firm needs to take down the listing and notify the consumers of the same.




Kashmir, trade war, China — behind the Rupee’s fall #GS3 #Economy


After losing 113 paise or 1.6 per cent to close at 70.73 against the US dollar on Monday, the rupee opened with marginal recovery on Tuesday and was up 5 paise, trading at 70.69 to a dollar. The benchmark Sensex that had lost 418 points on Monday also recovered and was trading at 36,819 with a gain of 120 points Tuesday morning.


Why did the rupee fall?


The Monday’s rupee fall was the biggest single day fall in six years as it hit a five month low of 70.73. While trade war fears between US and China and a sharp fall in Chinese Yuan (breaching 7 to a dollar) hit the global market sentiments and decline in currencies, the political developments in India following the government’s decision on Jammu and Kashmir along with continuing outflow of foreign funds from Indian equities further weakened the rupee. Between July and August (till Monday) FPIs have pulled out a net of around Rs 20,000 crore from Indian equities.


What could be the fallout of weakening Yuan?


The biggest concern in the market was on account of Yuan falling below seven to a dollar on Monday to close at 7.03. Markets were concerned that China was devaluing its currency to support its export businesses and such a move could hurt the business interest of other countries.


While a weakening Yuan provides competitive advantage to Chinese exporters, it puts other countries and their exporters at a disadvantage as their exports become relatively uncompetitive, from the price aspect.


A weakness in Yuan comes after the country witnessed its worst gross domestic product growth numbers in 25 years, at 6.2% in the quarter ended June. While the slowdown in GDP numbers are learnt to be a result of a fallout of trade war with the US and overall slowdown in global growth, many feel that China may be devaluing its currency to boost its exports and push growth.






What are Articles 370 and 35A? #GS2 #Governance


What is Article 370?


Included in the Constitution on October 17, 1949, Article 370 exempts J&K from the Indian Constitution (except Article 1 and Article 370 itself) and permits the state to draft its own Constitution. It restricts Parliament’s legislative powers in respect of J&K.


For extending a central law on subjects included in the Instrument of Accession (IoA), mere “consultation” with the state government is needed. But for extending it to other matters, “concurrence” of the state government is mandatory. The IoA came into play when the Indian Independence Act, 1947 divided British India into India and Pakistan.


For some 600 princely states whose sovereignty was restored on Independence, the Act provided for three options: to remain an independent country, join Dominion of India, or join Dominion of Pakistan


— and this joining with either of the two countries was to be through an IoA.



Though no prescribed form was provided, a state so joining could specify the terms on which it agreed to join. The maxim for contracts between states is pacta sunt servanda, i.e. promises between states must be honoured; if there is a breach of contract, the general rule is that parties are to be restored to the original position. A number of other states enjoy special status under Article 371, from 371A to 371I.


What were the terms included in the IoA for Kashmir?


The Schedule appended to the Instrument of Accession gave Parliament the power to legislate in respect of J&K only on Defence, External Affairs and Communications. In Kashmir’s Instrument of Accession in Clause 5, Raja Hari Singh, ruler of J&K, explicitly mentioned that the terms of “my Instrument of Accession cannot be varied by any amendment of the Act or of Indian Independence Act unless such amendment is accepted by me by an Instrument supplementary to this Instrument”.


Clause 7 said “nothing in this Instrument shall be deemed to commit me in any way to acceptance of any future constitution of India or to fetter my discretion to enter into arrangements with the Government of India under any such future constitution”.


How did the accession come about?


Raja Hari Singh had initially decided to remain independent and sign standstill agreements with India and Pakistan, and Pakistan in fact signed it. But following an invasion from tribesmen and Army men in plainclothes from Pakistan, he sought the help of India, which in turn sought the accession of Kashmir to India. Hari Singh signed the Instrument of Accession on October 26, 1947 and Governor General Lord Mountbatten accepted it on October 27, 1947.


It was India’s stated policy that wherever there was a dispute on accession, it should be settled in accordance with the wishes of people rather than a unilateral decision of the ruler of the princely state.


In India’s acceptance of the IoA, Lord Mountbatten stated that “it is my Government’s wish that as soon as law and order have been restored in Kashmir and her soil is cleared of the invader, the question of the State’s accession be settled by a reference to the people”.


India regarded accession as purely temporary and provisional, as stated in the Government of India’s White Paper on J&K in 1948. In a letter to J&K Prime Minister Sheikh Abdullah dated May 17, 1949, Prime Minister Jawaharlal Nehru with the concurrence of Vallabhbhai Patel and N Gopalaswami Ayyangar wrote: “It has been settled policy of Government of India, which on many occasions has been stated both by Sardar Patel and me, that the Constitution of Jammu and Kashmir is a matter for determination by the people of the state represented in a Constituent Assembly convened for the purpose.”


How was Article 370 enacted?


The original draft was given by the Government of J&K. Following modification and negotiations, Article 306A (now 370) was passed in the Constituent Assembly on May 27, 1949. Moving the motion, Ayyangar said that though accession was complete, India had offered to have a plebiscite taken when the



conditions were created, and if accession was not ratified then “we shall not stand in the way of Kashmir separating herself away from India”.


On October 17, 1949, when Article 370 was finally included in the Constitution by India’s Constituent Assembly, Ayyangar reiterated India’s commitment to plebiscite and drafting of a separate constitution by J&K’s Constituent Assembly.


Was Article 370 a temporary provision?


It is the first article of Part XXI of the Constitution. The heading of this part is ‘Temporary, Transitional and Special Provisions’. Article 370 could be interpreted as temporary in the sense that the J&K Constituent Assembly had a right to modify/delete/retain it; it decided to retain it. Another interpretation was that accession was temporary until a plebiscite.


The Union government, in a written reply in Parliament last year, said there is no proposal to remove Article 370. Delhi High Court in Kumari Vijayalaksmi (2017) too rejected a petition that said Article 370 is temporary and its continuation is a fraud on the Constitution.


The Supreme Court in April 2018 said that despite the headnote using the word “temporary’, Article 370 is not temporary. In Sampat Prakash (1969) the SC refused to accept Article 370 as temporary. A five-judge Bench said “Article 370 has never ceased to be operative”. Thus, it is a permanent provision.


Can Article 370 be deleted?


Yes, Article 370(3) permits deletion by a Presidential Order. Such an order, however, is to be preceded by the concurrence of J&K’s Constituent Assembly. Since such an Assembly was dissolved on January 26, 1957, one view is it cannot be deleted anymore. But the other view is that it can be done, but only with the concurrence of the State Assembly.


What is Article 370’s significance for the Indian Union?


Article 370 itself mentions Article 1, which includes J&K in the list of states. Article 370 has been described as a tunnel through which the Constitution is applied to J&K. Nehru, however, said in Lok Sabha on November 27, 1963 that “Article 370 has eroded”.


India has used Article 370 at least 45 times to extend provisions of the Indian Constitution to J&K. This is the only way through which, by mere Presidential Orders, India has almost nullified the effect of J&K’s special status. By the 1954 order, almost the entire Constitution was extended to J&K including most Constitutional amendments.


Ninety-four of 97 entries in the Union List are applicable to J&K; 26 out of 47 items of the Concurrent List have been extended.; 260 of 395 Articles have been extended to the state, besides 7 of 12 Schedules.


The Centre has used Article 370 even to amend a number of provisions of J&K’s Constitution, though that power was not given to the President under Article 370. Article 356 was extended though a similar



provision that was already in Article 92 of the J&K Constitution, which required that President’s Rule could be ordered only with the concurrence of the President.


To change provisions for the Governor being elected by the Assembly, Article 370 was used to convert it into a nominee of the President. To extend President’s rule beyond one year in Punjab, the government needed the 59th, 64th, 67th and 68th Constitutional Amendments, but achieved the same result in J&K just by invoking Article 370.


Again, Article 249 (power of Parliament to make laws on State List entries) was extended to J&K without a resolution by the Assembly and just by a recommendation of the Governor. In certain ways, Article 370 reduces J&K’s powers in comparison to other states. It is more useful for India today than J&K.


Is there any ground in the view that Article 370 is essential for J&K being a part of India?


Article 3 of the J&K Constitution declares J&K to be an integral part of India. In the Preamble to the Constitution, not only is there no claim to sovereignty, but there is categorical acknowledgement about the object of the J&K Constitution being “to further define the existing relationship of the state with the Union of India as its integral part thereof.


Moreover people of state are referred as ‘permanent residents’ not ‘citizens’.” Article 370 is not an issue of integration but of autonomy. Those who advocate its deletion are more concerned with uniformity rather than integration.


What is Article 35A?


Article 35A stems from Article 370, having been introduced through a Presidential Order in 1954. Article 35A is unique in the sense that it does not appear in the main body of the Constitution — Article 35 is immediately followed by Article 36 — but comes up in Appendix I. Article 35A empowers the J&K legislature to define the state’s permanent residents and their special rights and privileges.


Why is it being challenged?


The Supreme Court will examine whether it is unconstitutional or violates the basic structure of the Constitution. But unless it is upheld, many Presidential Orders may become questionable. Article 35A was not passed as per the amending process given in Article 368, but was inserted on the recommendation of J&K’s Constituent Assembly through a Presidential Order.


Article 370 is not only part of the Constitution but also part of federalism, which is basic structure.


Accordingly, the court has upheld successive Presidential Orders under Article 370.


Since Article 35A predates basic structure theory of 1973, as per Waman Rao (1981), it cannot be tested on the touchstone of basic structure. Certain types of restrictions on purchase of land are also in place in several other states, including some in the Northeast and Himachal Pradesh.


Domicile-based reservation in admissions and even jobs is followed in a number of states, including under Article 371D for undivided Andhra Pradesh. The Centre’s recent decision extending to J&K



reservation benefits for SCs, STs, OBCs and those living along international borders, announced last week. throws the spotlight back on Article 35A.


Parent provision and its offshoot


Article 370


Part of the Constitution ever since it came into effect, it lays down that only two Articles would apply to J&K: Article 1, which defines India, and Article 370 itself. Article 370 says other provisions of the Constitution can apply to J&K “subject to such exceptions and modifications as the President may by order specify”, with the concurrence of the state government and the endorsement of the J&K Constituent Assembly.


Article 35A


Introduced by a Presidential Order of 1954, it empowers the J&K legislature to define a “permanent resident” of the state, and to provide special rights and privileges to those permanent residents.






What has changed in Jammu and Kashmir #GS2 #Governance


The BJP on Monday fulfilled its election promise of removing the special status for Jammu and Kashmir in India’s Constitution. Special status was withdrawn by invoking the same Article 370 which had been seen as firewalling the autonomy of Jammu and Kashmir.


What are the constitutional issues in — and arising out of — this development? What will change in the state and the country? What can be the basis of a possible legal challenge to the decision of the government?


Has Article 370 been scrapped?


The Constitution (Application to Jammu and Kashmir) Order, 2019, issued by President Ram Nath Kovind “in exercise of the powers conferred by Clause (1) of Article 370 of the Constitution”, has not abrogated Article 370. While this provision remains in the statute book, it has been used to withdraw the special status of Jammu and Kashmir.


The Presidential Order has extended all provisions of the Indian Constitution to Jammu and Kashmir. It has also ordered that references to the Sadr-i-Riyasat of Jammu and Kashmir shall be construed as references to the Governor of the state, and “references to the Government of the said State shall be construed as including references to the Governor of Jammu and Kashmir acting on the advice of his Council of Ministers”.



This is the first time that Article 370 has been used to amend Article 367 (which deals with Interpretation) in respect of Jammu and Kashmir, and this amendment has then been used to amend Article 370 itself.


What is the status of Article 35A now?


Article 35A stems from Article 370, and was introduced through a Presidential Order in 1954. Article 35A does not appear in the main body of the Constitution — Article 35 is followed by Article 36 — but appears in Appendix I. Article 35A empowers the Jammu and Kashmir legislature to define the permanent residents of the state, and their special rights and privileges.


Monday’s Presidential Order has extended all provisions of the Constitution to Jammu and Kashmir, including the chapter on Fundamental Rights. Therefore, the discriminatory provisions under Article 35A are now unconstitutional.


The President may also withdraw Article 35A. This provision is currently under challenge in the Supreme Court on the ground that it could have been introduced in the Indian Constitution only through a constitutional amendment under Article 368, and not through a Presidential Order under Article 370. However, Monday’s Presidential Order, too has amended Article 367 without following the amending process.


So, what has changed in Jammu and Kashmir?


Rajya Sabha on Monday approved The Jammu and Kashmir Reorganisation Bill, 2019. The Bill will come up in Lok Sabha on Tuesday, and is expectedly to pass easily. In effect, the state of Jammu and Kashmir will now cease to exist; it will be replaced by two new Union Territories: Jammu and Kashmir, and Ladakh. UTs have become states earlier; this is the first time that a state has been converted into a UT. The UT of Jammu and Kashmir will have an Assembly, like in Delhi and Puducherry.


Article 3 of the Constitution gives Parliament the power to amend the Constitution by a simple majority to change the boundaries of a state, and to form a new state. But this change requires that such a Bill be first referred to the concerned state Assembly by the President for ascertaining its views. Explanation II of Article 3 says Parliament’s power extends to forming Union Territories.


Not only has Jammu and Kashmir lost its special status, it has been given a status lower than that of other states. Instead of 29, India will now have 28 states. Kashmir will no longer have a Governor, rather a Lieutenant Governor like in Delhi or Puducherry.


It is also likely that corporates and individuals will be able to buy land in Jammu and Kashmir. Non-Kashmiris might now get jobs in Kashmir. A process of demographic change might begin, and progress over the coming decades.


What is the significance of Article 370?



The most important feature of federalism in the United States was the “compact” between the 13 erstwhile British colonies that constituted themselves first into a confederation and then into a federal polity under the country’s 1791 constitution.


India’s Supreme Court in State of West Bengal v. Union of India (1962) attached the highest importance to an “agreement or compact between states” as an essential characteristic of federalism. In SBI (2016), the apex court accepted the presence of this compact for Kashmir.


Article 370 was an essential facet of India’s federalism because, like the compact in the United States, it governed the relationship of the Union with Jammu and Kashmir. The Supreme Court has held federalism to be part of the basic structure of India’s Constitution.


The original draft of Article 370 was drawn up by the Government of Jammu and Kashmir. A modified version of the draft was passed in the Constituent Assembly of India on May 27, 1949. Moving the motion, N Gopalaswami Ayyangar said that if the accession was not ratified by a plebiscite, “we shall not stand in the way of Kashmir separating herself away from India”.


On October 17, 1949, Article 370 was included in India’s Constitution by the Constituent Assembly. Some critics of Article 370 have argued earlier that Kashmir joined India in 1947 without any conditions, and Article 370 unnecessarily gave it special status. However, the drafting of the Constitution ended on November 26, 1949 — Article 370 had been included before the Constitution was adopted.


What did the Instrument of Accession say?


The Indian Independence Act, 1947, divided British India, i.e., the territories under the direct administration of the British, into India and Pakistan. The 580-odd princely states that had signed subsidiary alliances with the British had their sovereignty restored to them, and were given the options of remaining independent, joining the Dominion of India, or joining the Dominion of Pakistan.


Section 6(a) of the Act said joining either India or Pakistan would have to be through an Instrument of Accession. States could specify the terms on which they were joining one of the new dominions. Technically, therefore, the Instrument of Accession was like a treaty between two sovereign countries that had decided to work together.


The maxim of pacta sunt servanda in international law, which governs contracts or treaties between states, asks that promises must be honoured. Monday’s Presidential Order under Article 370 is a negation of the constitutional pact that India signed with Maharaja Hari Singh.


The Maharaja, the Hindu king of a Muslim-majority state, had initially wanted to stay independent. He signed the Instrument of Accession on October 26, 1947, after Afridi tribesmen and Pakistan Army regulars invaded the state, and India agreed to help only after he acceded.


The Schedule appended to the Instrument of Accession gave the Indian Parliament power to legislate for Jammu and Kashmir on only defence, external affairs and communications.



In Clause 5 of the Instrument of Accession, Hari Singh said that the terms of “my Instrument of Accession cannot be varied by any amendment of the Act or of The Indian Independence Act unless such amendment is accepted by me by an Instrument supplementary to this Instrument”.


In Clause 7, he said: “Nothing in this Instrument shall be deemed to commit me in any way to acceptance of any future Constitution of India or to fetter my discretion to enter into arrangements with the Government of India under any such future Constitution.”


Article 370 was a constitutional recognition of the conditions mentioned in the Instrument of Accession, and reflected the contractual rights and obligations of the two parties.


But wasn’t Article 370 just a temporary provision?


Article 370 is the second Article of Part XXI of India’s Constitution, which is titled “Temporary, Transitional and Special Provisions”. Article 370 was temporary in the sense that the Constituent Assembly of Jammu and Kashmir was given the right to modify/delete/retain it. The Constituent Assembly of Kashmir decided in its wisdom to retain it.


The other view was that it was “temporary” until a plebiscite had been held to ascertain the wishes of the people of Jammu and Kashmir. In a written reply to Parliament last year, the government had said there was no proposal to remove Article 370.


  • In Kumari Vijayalakshmi Jha vs Union Of India (2017), Delhi High Court rejected a petition that argued that Article 370 was temporary, and that its continuation was a fraud on the Constitution.


  • In April 2018, the Supreme Court said that the word “temporary” in the headnote notwithstanding,


Article 370 was not temporary.


  • In Santosh Kumar (2017), the apex court said that due to historical reasons, Jammu and Kashmir had a special status.


  • The Supreme Court in SBI v Zaffar Ullah Nehru (2016) observed that the federal structure of the Constitution is reflected in Part XXI. The court also said that J&K has a special status, and that Article 370 was not temporary. The court referred to Article 369 of Part XXI that specifically mentions the period of five years; no time limit is mentioned in Article 370. The court observed that Article 370 cannot be repealed without the concurrence of the Constituent Assembly of Jammu and Kashmir.


  • In Prem Nath Kaul (1959), a five-judge Bench of the Supreme Court observed that Article 370(2) shows that the continuance of the exercise of powers conferred on Parliament and the President by the relevant temporary provisions of Article 370(1) is made conditional on the final approval of the Constituent Assembly of Jammu and Kashmir.


  • In Sampat Prakash (1968), the apex court decided that Article 370 could be invoked even after the dissolution of the Constituent Assembly of Jammu and Kashmir. “Article 370 has never ceased to be operative,” the five-judge Bench said.



The Resolution moved in Rajya Sabha by the Home Minister (and passed by the House) states that Monday’s Presidential Order will be notwithstanding any treaty, agreement, Instrument of Accession, court decisions, law, rules, custom or usage, etc.


What is the reason for the secrecy, lockdown in Kashmir?


The unprecedented security deployment, detention of political leaders in their homes, and the snapping of communication links suggest the government anticipates mass protests. A decision to overturn the very basis of the accession of Jammu and Kashmir has been taken without consultation or negotiation, at a time when the state does not have a popularly elected government.


The Presidential Order states that state government’s concurrence has been taken; it probably means the concurrence of the Governor, who is a nominee of the central government.


Didn’t Congress governments too misuse Article 370?


Yes, they did. A number of Presidential Orders were issued against the letter and spirit of the Instrument of Accession. By the Presidential Order of 1954, almost the entire Constitution (including most constitutional amendments) was extended to Jammu and Kashmir.


Ninety-four out of the 97 entries in the Union List are today applicable to Jammu and Kashmir as to any other state. Two hundred and sixty out of the 395 Articles of the Constitution have been extended to the state. Seven out of the 12 Schedules of the Constitution of India too, have been extended to Jammu and Kashmir.


Over the years, the central government has used Article 370 to amend a number of provisions of the Jammu and Kashmir constitution, even though that was not the power given to it under this Article of the Constitution of India. Article 370 had a limited mandate to extend the applicability of the Constitution of India to Jammu and Kashmir.


Thus, Article 356 (on the imposition of President’s Rule in the states) was extended to Jammu and Kashmir, even though a similar provision was already there in Article 92 of Jammu and Kashmir’s constitution. To change the provision in the Jammu and Kashmir constitution regarding the Governor being elected by the state Assembly, Article 370 was used to convert the position into a nominee of the President.


Governors have proved to be the Centre’s agents in the state. Monday’s Order has now extended the remaining Articles of the Constitution after withdrawing all the earlier Orders.


Why didn’t governments before this take such a step?


Nehru probably lacked the political will, and wanted to honour the constitutional pact with Maharaja Hari Singh. He also had a sentimental connection with Kashmir. Atal Bihari Vajpayee’s idea was that of the healing touch — in the form of Kashmiriyat, Insaniyat and Jamhooriyat.



The first Modi government was in an alliance with the PDP in Jammu and Kashmir till 2018. The Home Minister has said that once peace returns and the situation improves, the government will restore statehood to Jammu and Kashmir.


Can the Presidential Order be challenged in the Supreme Court? On what grounds?


It will most likely be challenged. However, the Supreme Court will consider that Article 370 does, indeed, give sweeping powers to the President. It might also take two to three years for a Constitution Bench of the court to decide such a challenge.


The possible grounds of challenge could include the argument that the conversion of Jammu and Kashmir into a Union Territory is in violation of Article 3, as the Bill was not referred by the President to the state Assembly. Also, can the Constituent Assembly mean Legislative Assembly? Are the Governor and the state government one and same?


The constitutional relevance of Instrument of Accession will also be examined by the court. Whether Article 370 was part of the basic structure will likely be considered. The use of Article 367 in amending Article 370 will also be examined.


So, is Kashmir now fully integrated with India?


Article 3 of the Jammu and Kashmir constitution itself declares the state to be an integral part of India. In the preamble of the Jammu and Kashmir constitution, not only is there no claim to sovereignty like in the Constitution of India, there is, rather, a categorical acknowledgment that the object of the Jammu and Kashmir constitution is “to further define the existing relationship of the state with the Union of India as its integral part thereof”.


Integration thus, was already complete. Article 370 merely gave some autonomy to Jammu and Kashmir, which has now been withdrawn






Transparency on details of sellers among key features of draft guidelines #GS3 #Economy


In an effort to curb sale of counterfeit products online and “unfair” trade practices by e-commerce companies, the government has drafted guidelines aimed at making these entities and their sellers more transparent and accountable to consumers.


The guidelines formulated for this purpose include conditions mandating e-commerce firms to accept returns on “defective” and “spurious” products and measures directing them to display details of their sellers.



The e-Commerce Guidelines for Consumer Protection 2019 will be applicable on all business-to-consumer (B2C) e-commerce platforms, according to the Department of Consumer Affairs, which has sought feedback from stakeholders by September 16.


According to the draft, a copy of which The Indian Express has viewed, the government proposes to make it mandatory for e-commerce entities to accept returns in the event the products delivered are “defective, wrong or spurious” or if they do not have the characteristics or features advertised.


E-commerce companies will also have to display details about the sellers on their website.


These include identity of the seller’s business, legal name, principal geographic address, products they sell, their website, email address and other contact information along with details on how customers can contact them.


The e-commerce firm also has to clarify what sort of business entity the seller is, the guidelines state.


Currently, several e-commerce sites, including popular shopping and restaurant platforms, do not furnish full details about their sellers and consumers have to return goods, regardless of whether or not they are counterfeited, within a specific timeline.


The draft guidelines also propose to increase transparency in contracts signed between e-commerce entities and the sellers, directing them to display terms of their contracts relating to aspects like return, refund, exchange, warranties and guarantees, delivery and shipment, mode of payments and redressing grievances.


This is to enable consumers to make “informed choices”, it states.


The draft has also sought transparency on the procedure followed to address complaints, directing e-commerce companies to publish contact details of their grievance officers on their websites and setting a one-month timeline for them to redress issues from the time the complaint is registered.


E-commerce platforms will also not be allowed to “directly or indirectly” influence the price of the products and services they offer, according to the draft.


It also says they cannot adopt any trade practice “for the purpose of promoting the sale, use or supply” of any goods or services or use “unfair” and “deceptive” methods and practices that may influence the consumer’s transactional decisions.


The guidelines also aim to restrict sellers from “falsely” representing themselves as consumers or posting reviews as well as misrepresenting and exaggerating the quality and features of products on their sites.


Currently, most e-commerce platforms don’t disclose seller details or their general terms with them, so the consumer has very little in their hands to hold them accountable in case a fake product is received or a return is rejected.



These guidelines, if enforced, will change that,” said Sachin Taparia, founder of community engagement platform LocalCircles, which conducted the preliminary consumer consultations for these guidelines.


He expects the guidelines to be applicable to e-commerce businesses like inventory-based platforms, marketplaces for new and used goods, service-based platforms like ride-hailing applications, food delivery platforms, travel and hotel booking services, event ticketing platforms and online pharmacies.






With J&K status change, 15th Finance Commission will have to redo math #GS3 #Economy


With Jammu and Kashmir set to lose its statehood, it would not be eligible for any share of tax devolution from the Centre’s divisible pool as decided by the finance commission, leaving fund allocation entirely in the hands of the Central government.


Jammu and Kashmir will lose its financial autonomy, and it does not augur well for fiscal federalism,” said an ex-member of a previous finance commission. Funds for Union territories (including Delhi, Puducherry, etc) are decided by the Central government in the Union Budget and voted by Parliament.


The Finance Commission (FC) recommends how tax revenues collected by the Central government should be shared between the Centre and the states. Further, it also recommends inter se distribution of these resources among states.


For the five years ending 2019-20, the Union Finance Ministry had agreed to the Fourteenth Finance Commission’s recommendations that 42 per cent of tax collections (compared with 32 per cent recommended by the Thirteenth Finance Commission for the previous five years ending 2014-15) by the Central government should go to states.


Of the states’ share, the Commission had recommended that Jammu and Kashmir should receive 1.854 per cent from 2015-16 till 2019-20. This was higher than 1.551 per cent the state received during the previous five years.


Jammu and Kashmir was one of the few states that was accorded a special category status by the Central government. Almost 30 per cent of the devolution was earmarked for these states. Further, they favourable treatment in terms of the grant versus loan mix compared with other states.


The Fourteenth Finance Commission did not have make specific recommendations for these states with special category status, but accounted for their special characteristics by assigning weightage to forest cover and international border lengths in allowing for higher devolution. “Special category status is not really a Constitutional category,” said another former member.


According to sources close to the development, the Fifteenth Finance Commission chaired by NK Singh, may have to rework its calculations for horizontal devolution (sharing of resources among states) with



the change in status of Jammu & Kashmir’s statehood. The state is proposed to be organized into two Union Territories – Jammu & Kashmir (with Legislative Assembly) and Ladakh (without Legislative Assembly). “Instead of 29 states, devolution would be for 28 states. They will have to redo the arithmetic,” said a source, who did not wish to be named.


The Union Cabinet had on July 17 approved a proposal to extend the tenure of the Fifteenth Finance Commission by six more months. It is expected to now submit its report by November end 2019. Members of the Commission have completed visits to various states for consultation with stakeholders, including state government functionaries.


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